ABSTRACT
Shortages and the Sellers’ Market So let us now pass to an examination of the causes of shortage. This must be
distinguished from scarcity, the latter being a situation in which demand unlimited (by either price or rationing) exceeds supply, while shortage means that individuals (factory managers or consumers) with a legitimate claim on resources cannot obtain what they want or need, even though they have the money. Shortages can be due to natural causes (e.g. a drought), to unforeseen circumstances (events abroad), to imperfect foresight (e.g. demand was underestimated, supply overestimated), to deliberate-policy (as when retail prices are not increased, though demand is known to exceed supply), or to an overambitious plan which exceeds the resources available (but is meant to have a ‘mobilising’ function).
